Of liquidating the

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There are two main types of liquidations for insolvent companies– compulsory liquidation and creditor’s voluntary liquidation (CVL).

Since the liquidation of a company ultimately means the end of the business, as all of the assets are sold to repay as many debts as possible, it would seem that there would be limited advantages in this situation.A creditors’ voluntary liquidation takes place when the directors purposefully choose to liquidate the company.Although liquidating voluntarily offers a number of advantages, it is important that you also consider the following disadvantages of both forms of liquidation: Liquidating your company voluntarily is more expensive for the directors initially (as they might be asked for a fee) rather than waiting for a creditor or HMRC to force the company into compulsory liquidation.Although a petition advertisement still has to be listed in the Gazette if you opt for a CVL, it will be apparent that it was a voluntary decision, and not a hostile action taken by creditors or HMRC.If you really don’t want to liquidate your company, but feel that is the only option left, a simple consultation with an insolvency practitioner could reveal some alternative solutions that you may want to consider.

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